The 2021 IndustryWeek Technology Survey sheds pandemic-shaded light on the ongoing digital transformation journey.
The responses to the 2020 IndustryWeek Technology Survey painted a clear picture – manufacturers last year truly accepted the importance of undergoing a digital transformation. To be clear, it’s not that manufacturers didn’t understand the need pre-pandemic, but the impetus to intensify the journey was noticeably absent. It’s not anymore.
To say the past 12 months have been tough for manufacturers is an understatement.
- COVID-19 lockdowns and restrictions continued to impact operations.
- Buying habits and customer expectations evolved.
- Supply chains started crumbling.
- Hackers recognized manufacturers as a prime target.
Once again, digital transformation is the overwhelming theme of the 2021 IndustryWeek Technology Survey, with 72% of respondents either agreeing or strongly agreeing that the pandemic increased the urgency of undergoing a digital transformation.
The new wrinkle? Manufacturing (OT) professionals are playing meaningful roles in directing the initiative. Specifically, 61% of respondents agree or strongly agree that manufacturing (OT) professionals are more involved in leading the digital transformation initiative when compared with other company departments.
Interestingly, when asked to consider the role manufacturing (OT) professionals play in piloting and deploying new manufacturing technologies, more respondents identify it as playing a functional (42%) role rather than strategic (32%) or transformational (26%) role.
Defining Digital Transformation
Of course, what defines digital transformation can vary significantly depending on what a business identifies as the most important technologies to help the company deal with the challenges of operating within the digital economy.
When asked to rate which technologies will hold the most meaning for the organization in the future, two buckets quickly surface: automation/robotics (37%) and analytics-based solutions (32%). Additive manufacturing technology takes a distant third at 14%. In addition, 72% of respondents claim familiarity with the technology they value most.
When digging deeper, these same technologies are also driving investments in the coming year. However, the rankings shift a bit here, with data-analytics taking the top spot (51%), followed by automation/robotics (39%) and additive (24%).
Among manufacturers who have already invested in robotics and automation, 48% see the technology as either critical or important to achieving growth and sustaining current demands on production environments. Of companies using robots, the most common applications include pick-and-place and material handling.
When deploying desired technology into production environments, the biggest challenge remains the same as in previous years: finding money in the budget. Although far behind funding, the next three challenges (training, confidence in technology maturity, and transitioning from pilot to proven use case) were of almost equal significance.
When asked how their organizations prioritize the benefits of embracing the latest technologies, respondents ranked improving OT operations and performance levels as most important. The next important benefits were driving the ability to innovate, aligning OT with business goals, and enabling or ensuring competitive differentiation.
Matching these priorities with investments over the next 12 months, the largest percentage of respondents are focusing on upgrading existing manufacturing technology investments. Adding new technologies to enable innovation and identifying and capitalizing on new data-driven opportunities tied for second and third place in the rankings. Leading a digital transformation came in a few points lower to round out the priorities.
Considering the overwhelming urgency around the need for a digital transformation, it may seem odd that “leading a digital transformation” rings in as the bottom priority. However, it could point to manufacturers taking a methodical approach to accomplishing transformative goals. They are starting by updating what the company has already invested in, then finding ways to leverage the data those existing and updated systems are providing, before ultimately adding new technologies to fill the gaps. It is simply a matter of putting the building blocks in place to prepare the organization for success along the digital transformation journey.
Pandemic Boost Yields Steady Growth
Although wearables, such as augmented or virtual reality (AR/VR) headsets, did not find their way into the top three technologies for future significance or current investment, 72% of respondents identified benefits to embracing the technology. An increase in production and efficiency was clearly the most important benefit at 50%, with the ability to increase actionable data taking a distant second (33%).
This aligns well with what Eric Abbruzzese, Augmented and Virtual Reality Research Director at ABI Research, is seeing. “As a high-value element of digitization, AR adds a visual element to a data-heavy system that can sometimes devalue the human worker,” he noted. “AR brings the worker back into the equation and creates a synergistic relationship between worker and IT/OT systems, where each component benefits from the other.”
According to ABI’s most recent findings, the industrial market will quicken its adoption of wearable technologies. This increasing adoption will generate an industrial augmented reality market value of $70 billion by 2025, ABI predicts.
After all, industrial environments create a perfect storm of variables and needs for AR to address and fill. “High complexity leads to severe downtime and cost inefficiency, which AR can lessen,” Abbruzzese said in a statement. “Training and knowledge share are critical due to that complexity, and AR can enhance training efficacy and retention while also being used to capture, share and view that knowledge. Integration into important platforms like IoT, PLM, ERP, and WMS enables a two-way benefit, where AR can improve those systems and those systems feed data to improve AR. All components working together can be a challenge, but the return grows exponentially.”
What About Security?
Over the past year, the number of announced cyber breaches and attacks has intensified, with manufacturing taking center stage. Manufacturers have become more attractive targets for a combination of reasons. Increased connectivity into operating environments as well as the rapid effort to enable remote connections are two prime drivers.
The question is how to solve the issue. While a successful security strategy has always looked at protecting the enterprise as a “team sport,” deploying, maintaining, and nurturing that strategy has routinely fallen outside of the realm of the production environment and squarely on the shoulders of IT.
One encouraging insight: The well documented power struggle that has existed between IT and OT since digital technology started to gain importance within operational environments might be coming to an end. Specifically, only 8% of respondents noted difficulties in ensuring IT/OT are on the same page. This may not seem like a big issue. However, considering the level of connectivity fueling today’s production environments, the successful convergence of these two vital divisions will prove instrumental going forward.
Manufacturing leaders recognize the problem, and they are ready to contribute. A look at the numbers shows 71% of respondents either agree or strongly agree that manufacturing (OT) professionals have a responsibility for protecting connected equipment. When asked about their company’s cybersecurity preparedness, just over half (51%) say they are somewhat confident, with only 22% expressing extreme confidence.
Bottom line: Digital transformation is an imperative for today’s manufacturers to survive. Not only do companies understand the need, they are taking noticeable steps to combat the hurdles and securely position their organizations to thrive within an increasingly digital economy.
Download a PDF of the 2021 IW Tech Survey Results
Written by: Peter Fretty, Journalist, for Industry Week.